The value of the UK’s private healthcare market rose to a record £12.4bn last year as long NHS waiting lists fuelled demand from individuals and the health service paid for nearly £3.5bn of procedures to help ease the care backlog.
As private medical insurance boomed, total revenues generated in the independent healthcare sector hit an all-time high in real terms pegged to 2003 prices, research revealed.
The total value of work done in hospitals, clinics and by privately practising doctors, including cataract removals, knee surgery and MRI scans, was £1bn higher than in 2022, according to the latest report by the health data provider LaingBuisson.
More patients went private last year as the NHS waiting list peaked at 7.77 million in September, up sharply from 4.57 million at the end of 2019. Increasing numbers took out private medical insurance to fund their treatment, while there has been a decline in those paying out of their own pockets, LaingBuisson said.
To help clear the backlog, the NHS paid more to private providers to offer treatments. It spent £2.1bn in private hospitals last year – up from £1.9bn in 2022 – accounting for nearly a third of their revenues, compared with 10% two decades ago. The NHS spent a further £1.5bn at private clinics.
Of 1.3m procedures carried out by private hospitals and clinics in 2023, nearly 445,000 were funded by the health service, the report found.
Cataract surgery is the most common private procedure, costing about £2,000 for private payers and less for NHS contracts. Chemotherapy, upper gastrointestinal endoscopies, colonoscopies, hip replacements, knee arthroscopies and replacements and hernia repair were the top private procedures.
Wes Streeting, the health secretary, wants to use the private sector to cut the NHS care backlog. This week, he said delays within the health service spelled a “death sentence” for some NHS patients, as Keir Starmer stressed the need for more use of AI and technology.
Private acute hospitals made revenue of £6.7bn last year, up from nearly £6bn the year before. The five largest operators accounted for three-quarters of these revenues. The FTSE 250-listed firm Spire Healthcare and the Abu Dhabi-owned Circle Health Group are the two biggest, followed by the US company HCA Healthcare’s UK arm, the UK charity Nuffield Health and Australia’s Ramsay Health Care UK. The top four hospital groups have an annual turnover of £1bn or more.
Private clinics and privately practising doctors generated revenue of £4.9bn in 2023, while the NHS made £700m from treating non-NHS patients and international visitors – known as “embassy patients” – at private patient units, primarily in London, such as the Royal Marsden hospital in west London.
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Tim Read, the co-author of the report, said: “Increasingly we are seeing people willing to find alternatives rather than waiting to be seen on the NHS. Independent hospitals are seeing a continued boom in people claiming against health insurance entitlements, whilst independent clinics offering lower cost treatments – whether it’s cataract surgery or a diagnostic scan – are becoming an increasingly common sight on high streets across England, not just in more affluent areas traditionally associated with private healthcare.”
The two specialties with the longest NHS waits – ophthalmology and orthopaedics – continue to see the biggest boom in private healthcare. The NHS is now paying for more cataract surgery to be carried out by private eye clinics than it performs itself. The number of eye clinics has jumped since 2020, with Newmedica, SpaMedica, CHEC and Optegra all opening more sites. However, doctors have argued that the cataract boom means that there is less NHS funding to treat more serious conditions that can lead to blindness.
David Hare, who runs the industry body Independent Healthcare Providers Network, said: “Private healthcare is now becoming increasingly relevant to many more millions of people’s lives, with ‘going private’ now the ‘new normal’.”
